Indonesian Fintech Company Follows Strategy’s Lead Despite 96% Stock Drop Over Year

Indonesian fintech firm DigiAsia saw its Nasdaq-listed stock jump 90% after the company announced plans to raise up to $100 million to purchase Bitcoin. In a statement released Monday, DigiAsia said its board of directors approved its decision to establish a Bitcoin treasury reserve, which the company said aligns with a “growing trend” among publicly traded companies. As part of the strategy, the company also plans to set aside 50% of “any net profits” generated to fund the Bitcoin acquisition. This move follows the example of other public companies such as Strategy and Metaplanet, which are actively accumulating the first cryptocurrency despite market volatility.

Aggressive Strategy: From Reserves to Crypto Yield

According to the statement released Monday, DigiAsia’s board of directors approved the decision to establish a Bitcoin treasury reserve, which aligns with a “growing trend” among publicly traded companies. This move goes beyond simple Bitcoin accumulation; the company is pursuing a multifaceted strategy.

First, DigiAsia plans to set aside 50% of “any net profits” to fund the Bitcoin acquisition. This regular accumulation strategy from operational profits resembles Strategy’s approach, but with a significantly higher percentage of profits.

Second, the company is exploring raising up to $100 million in capital to buy Bitcoin and execute “crypto-based yield strategies.” This hints at a more complex approach than simply holding Bitcoin on the balance sheet.

“DigiAsia has initiated discussions with regulated partners on BTC yield strategies and the management of the BTC treasury reserve,” the company said, adding that it is evaluating capital markets solutions such as equity-linked offerings, convertible notes, and structured crypto finance instruments.

“DigiAsia’s approach differs from the pure accumulation we see at Strategy,” notes Alexei Kirienko, Managing Partner at EXANTE. “Crypto yield strategies imply more active portfolio management, including the possibility of staking, lending, or participating in decentralized finance protocols. This is potentially a riskier but also higher-yield approach.”

Market Reaction: Short-term Excitement Amid Long-term Issues

In the wake of the announcement, DigiAsia’s stock surged 91% on the Nasdaq, closing at $0.3553 on Monday. However, this enthusiasm quickly faded—the stock fell 23.47% in after-hours trading, according to Yahoo Finance data.

It’s important to note the historical context: DigiAsia’s stock has collapsed 96% over the past year, declining from $9.6 in May 2024. This indicates that despite the short-term excitement, the company is facing serious financial or operational challenges.

“Such a sharp jump in stock price following a Bitcoin purchase announcement is a typical market reaction to news of corporate crypto adoption,” explains Maria Stankevich, an analyst from TokenMetrics. “However, the subsequent decline in after-hours trading suggests that investors quickly reassessed the situation, taking into account the company’s overall issues that led to a 96% stock drop over the year.”

This volatility highlights a broader market trend: companies with problematic financial indicators may use Bitcoin strategy announcements for short-term stock price boosts, but long-term success will depend on fundamental business metrics.

DigiAsia’s Financial Position: Attempting to Change Course?

Founded in Jakarta, DigiAsia operates as a fintech-as-a-service provider, offering services including cashless payments and digital wallets in emerging markets, according to the statement.

The company disclosed last month that it generated $101 million in revenue in 2024, up 36% year-on-year, and it predicts a 24% revenue growth in 2025. These growth figures look impressive, but the sharp decline in stock value over the past year points to deeper issues in the business model or market valuations.

“The situation with DigiAsia resembles some dot-com era companies that tried to revive falling stocks by announcing new initiatives,” comments John Smith, an analyst from Digital Asset Research. “While a Bitcoin treasury strategy may make financial sense, investors should closely examine the underlying business metrics and the reasons for the 96% drop in stock value.”

Given that the company plans to direct 50% of net profits to Bitcoin purchases, questions arise about reinvestment in the core business and long-term growth. However, if the cryptocurrency yield strategy proves successful, it could provide additional revenue streams for the company.

Following the Leaders: The Corporate Bitcoin Treasury Trend

DigiAsia’s decision to accumulate Bitcoin follows in the footsteps of companies like Strategy and Metaplanet. Strategy, led by Michael Saylor, said Monday that it purchased another 7,390 BTC for $764.9 million, raising its total holdings to 576,230 BTC. Japan’s Metaplanet also announced Monday the purchase of an additional 1,004 BTC, bringing its total holdings to 7,800 BTC.

“We’re observing the spread of the corporate Bitcoin treasury model from large, established companies to medium-sized and even troubled ones,” notes Victor Pergamenschikov, a market analyst from TradingView. “This is a natural process in the evolution of any innovation. However, investors should distinguish between companies that have fundamental reasons and financial ability to adhere to a long-term Bitcoin accumulation strategy and those using it as a tactical move to boost stock prices.”

Notably, DigiAsia, with a market capitalization of around $39 million after the recent rise, is significantly smaller than Strategy or Metaplanet. This may limit its ability to influence the Bitcoin market, but also makes relatively smaller Bitcoin investments more significant for its balance sheet.

Unique Regional Aspect: Cryptocurrencies in Emerging Markets

One interesting aspect of DigiAsia’s announcement is their focus on emerging markets. As a fintech service provider in Indonesia, the company has direct access to one of the largest and fastest-growing markets in Southeast Asia.

“Integrating Bitcoin into fintech services in emerging markets has unique potential,” explains Satoshi Tanaka, an expert in emerging markets fintech. “In many Southeast Asian countries, a significant portion of the population lacks access to traditional banking services but is rapidly adopting mobile payments and digital finance. Bitcoin and stablecoins can play an important role in this ecosystem.”

Indonesia, with a population of over 270 million and a growing middle class, represents a significant market for fintech innovations. If DigiAsia can effectively integrate Bitcoin into its fintech offerings, it could create a competitive advantage and new revenue sources.

Potential Risks and Challenges

While the Bitcoin treasury strategy has attracted investor attention, it also comes with several key risks:

1. Bitcoin Volatility: Bitcoin’s price remains volatile, which could create significant fluctuations in the company’s asset value and lead to uncertainty in financial reporting.
2. Regulatory Uncertainty: Indonesia has a complex relationship with cryptocurrencies, with periodic changes in regulatory stance. This creates an additional layer of uncertainty for a local company.
3. Credit Ratings and Capital Access: Aggressive Bitcoin investment could affect the company’s credit ratings and its ability to attract traditional capital at competitive rates.
4. Yield Strategy Risks: The mentioned “crypto yield strategies” could expose the company to additional risks, including protocol risks, liquidity risks, and regulatory issues.

“Companies, especially those already experiencing financial difficulties, should carefully weigh the risks of a Bitcoin strategy,” warns Elena Andreeva, Professor of Finance at the Higher School of Economics. “While Bitcoin’s long-term returns have been impressive, short-term volatility could exacerbate operational issues and distract management from core business tasks.”

Market Implications and Future Outlook

DigiAsia’s decision could have several significant implications for the market and corporate Bitcoin adoption:

1. Geographic Expansion: Most corporate Bitcoin buyers so far have been from the US, Europe, or developed Asian countries like Japan. An Indonesian company’s entry expands the geographic reach of this trend.
2. Sector Diversification: As a fintech company, DigiAsia represents an interesting case since they could integrate Bitcoin not only as a treasury asset but into their products and services.
3. Yield Strategies: The emphasis on “crypto yield strategies” indicates the possible emergence of more sophisticated approaches to corporate Bitcoin investments beyond simple accumulation.
4. Signal for Small Companies: Successful implementation of this strategy could signal to other small and medium-sized public companies the viability of Bitcoin treasury.

“We’re likely in the early stages of broader Bitcoin adoption by corporate treasuries,” concludes Kirienko. “Pioneers like Strategy paved the way, and now we’re seeing a second wave of followers, including companies with different financial profiles and from various regions. The key question for investors is to distinguish between companies with sustainable long-term strategies and those simply following the trend for short-term gain.”

In the coming months, it will be interesting to observe whether DigiAsia can successfully implement its Bitcoin strategy and reverse the long-term downward trend of its stock. This will also be an important case study for evaluating the effectiveness of corporate Bitcoin investments for companies facing operational challenges.